Bringing Wi-Fi to the Skies

By Coco MastersMonday, Oct. 01, 2007

Brooks Kraft / Corbis for TIME

A passenger uses a laptop and a mobile device aboard a commercial flight.

If you press the "log in" button on the touch screen in front your seat on one of Virgin America's A320s, a message will read: coming soon. Do the same for the "www" button, and the exact same message pops up. If the roughly 200 million passengers who travel on aircraft in the U.S. each year aren't holding their breath for that day to arrive, you can't really blame them. Some travelers might have already experienced broadband services on private jets or international flights, such as those of Dubai-based Emirates, or Singapore Airlines and Lufthansa through the middle of last year. But while carriers in the U.S. have been talking about the prospect of in-flight web surfing on domestic flights for a few years, those promises have remained as empty as their commitments to on-time service.

Now, however, it looks as though our days of being sealed into airborne vaultsdisconnected, inaccessible and unaccountablereally are numbered. As carriers pour many more millions into in-flight entertainment systems, as was clear recently at Toronto's World Airline Entertainment Association (WAEA) conference, U.S. airlines are embracing new air-to-ground and satellite systems to offer wi-fi service on commercial flights as early as next spring. So far this year, the FAA has already received 42 applications to install the systems on new aircraft, as many as during all of last year.

Helping lead many of the airlines into the new era is Colorado-based AirCell, which in June 2006 won exclusive air-to-ground wi-fi rights by plunking down $31.3 million for 3-MHz of terrestrial digital wireless spectrum at a Federal Communications Commission auction. The company has already inked deals with American Airlines and Virgin America to install the its air-to-ground system equipment, which company founder Jimmy Ray has been fine tuning for the past decade and a half. The system will take to the air as soon as American Airlines retrofits a few of its transcontinental 767-200s later this year. Virgin America will do the same for its 10-plane fleet  in addition to 31 planes on order from Airbus.

Considering how long it has taken for the technology to become a reality, the setup sounds surprisingly simple. Two antennae, which AirCell CEO Jack Blumenstein says each measure "about the size of a Starbuck's venti cup," are installed on the plane. The equipment weighs less than 100 lbs., costs about $100,000 per jet and provides DSL-like speeds of 3.1 Mbps to upload. "Think of 100 cell towers around the U.S., each with a 250-mile radius," says Blumenstein. "Above 10,000 ft.when the FAA lets you turn on your laptopsyou'll have full network coverage border-to-border, coast to coast." AirCell also expects to have coverage across Canada, Mexico and the Caribbean, within a year. Says Charles Ogilvie, director of in-flight entertainment and partnerships at Virgin America, which will integrate AirCell's system into its Red in-flight entertainment system (IFE) "Aircell is exactly where we need them to be right now."

A hot spot in the air is like any on the ground. Passengers will log in on their laptops (or on IFEs) through the AirCell splash screen. Pricing hasn't been finalized but the company says that travelers will pay about $10 per flight segment or per day by credit card. Those who have memberships with wi-fi aggregators, such as Boingo or TMobile, might pay a supplemental fee. Since AirCell operates the system and maintains the network, it will give each carrier a cut of the revenue, which makes for an attractive business model on the part of the airline. "We see interest being staggeringly high," says Blumenstein. "I would have said if 10% [of passengers] who have these devices use it, we would be very pleased. But the returns from the market research are orders of 2 to 3 times that."

The early feedback from other systems hasn't always been so positive. Last year, Boeing disconnected its own billion-dollar satellite-based wi-fi service, Connexion by Boeing (CBB), because market demand didn't meet expectations. CBB also had a few drawbacks: the system's equipment weighed about 800 lbs.; it was expensive to install and for passengers to use; and it took weeks to retrofit a plane.

In Boeing's wake, at least two companies claim to have figured out how to make satellite-based systems workaffordably. Row 44 and Panasonic Avionics Corporation, the leading provider of in-flight entertainment, contend that because they are using existing technology and satellite infrastructure rather than a proprietary network, their services are cheaper for the passenger, and lighter (equipment weighs about 150 lbs.) and easier for the carrier, since installation can be worked into an aircraft's regular maintenance schedule. Row 44 announced at the WAEA conference that next spring Alaska Air will conduct a month-long test of its broadband system. The Malibu-based company also expects to launch in Europe in the third quarter of next year and to support routes between North America and Europe by the end of 2008. Panasonic Avionics is currently writing up its first contract with an airline (yet unannounced) and expects to start service next summer.

Unlike AirCell, neither Row 44 nor Panasonic Avionics have yet obtained FCC and FAA approval for their in-flight systems. Once they can get it, though, they could have an enormous advantage over the early leader, since cell towers will only work above land. With that in mind, Row 44 has partnered with Hughes Communications, the largest provider of two-way data satellite communications in the world, for broadband and mobile aviation purposes. Satellites 22,500 miles above the equator will enable global coverage, while Row 44's system will also be compatible with the picocell-based systems of OnAir and Aeromobile, two companies that provide satellite-based systems for in-flight mobile telephony abroad. This GSM telephony, however, will not be making its debut in the U.S. any time soon because the FCC and the FAA have no plans to relax their restrictions on the use of cellular phones in-flight.

Row 44's airline-partners will choose one of its three unlimited usage pricing models. Point-of-sale will cost passengers about $6 for a PDA device, or $8 for a laptop, and double the price on international flights. The airline can also choose to pick up the tab itself for every passenger on the plane  and undoubtedly pass it on to the price of each ticket  or, more likely than not, provide the service gratis to first and business class passengers but charge for it for people in coach.

Panasonic Avionics may seem a little behind its upstart rival, since the company needs regulatory approval in Western Europe, Iceland, Greenland, Canada and the U.S. But while Row 44's system might seem similar to that of Panasonic Avionics, says David Bruner, its executive director of corporate sales and marketing, Panasonic's integration of broadband into its in-flight entertainment product gives them a leg up with airline-customers. Prices, however, are slightly higher: $12 per hour, $22 for an entire flight  or 24 hours of service. "This is what we do," he says. "There are new competitors and they're inexperienced. It takes deep pockets to survive and perform in this marketplace."

Theoretically, Wi-Fi in the sky could provide an end-run around the restrictions on in-flight cell phone service. Systems providers say wi-fi-enabled devices, like a Skype VoIP handset, will work for calls but add that it really comes down to what passengers and airlines want. Carriers, for instance, will have the option of shutting off voice traffic. Laura Tolar, an American Airlines communications manager, says that voice capacity is not something that the carrier is considering. "Our customers don't want voice at this pointthey don't want the noise in the aircraft." Gregg Fialcowitz, president of Row 44, agrees: "A number of carriers are very leery of having voice on the plane. They're worried about the environmental impact and I'm not convinced that even if regulatory restrictions are relaxed that airlines will adopt it very quickly."

AirCell's Blumenstein is confident that picocell technology might not even need to come to the U.S. for voice services to take off because manufacturers are increasingly including wi-fi chips in new handsets. "One leading wireless carrier said that by this time next year over half the devices they ship they will have wi-fi chips in them," he says. But as it stands, 82% of the world's 3 billion mobiles are built for GSM systems.

Panasonic's Bruner, a former COO of AT&T's wireless aviation division, says that while many passengers may want voice "they don't want to do it all the time. Economics alone will keep people from yakking away in-flight." The tapping away, by contrast, is just getting started.